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Me tr opolitan T r anspor tation Author ity Hudson Yar ds T OD Robe rt Pa le y MT A: Pho to g ra phe r Pa t Ca she n Aug 2014 Dire c tor, T ra nsit- Orie nte d De ve lopme nt, MT A Ma rc h 22, 2018 Hudson Ya rds Ba c kg round: L

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SLIDE 1

Me tr

  • politan T

r anspor tation Author ity Hudson Yar ds T OD

Robe rt Pa le y Dire c tor, T ra nsit- Orie nte d De ve lopme nt, MT A Ma rc h 22, 2018

MT A: Pho to g ra phe r Pa t Ca she n Aug 2014

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SLIDE 2

Hudson Ya rds Ba c kg round:

L IRR Stora g e Ya rd Construc te d 1987 in Ma nha tta n’s Industria l We st Side 1987: 26 Ac re Ya rd L IRR ope ns. T ra c ks a re be low 10th a nd 11th Ave nue s a nd spa c e d to a llow c olumns to support future de ve lopme nt. 1989: MT A Ma ste r Pla n propose d e xte nding midtown de nsitie s we st to mone tize L IRR Ya rd a ir rig hts.

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SLIDE 3

Hudson Ya rds Distric t:

Ne w York City c re a te d c ompre he nsive ne ig hborhood pla n a nd fina nc e d the #7 subwa y line

Sourc e : HYDC

1990- 2005: T ra nsforma tion of industria l we st side :

  • City br
  • ade ne d pe r

spe c tive far be yond MT A site

  • City highlighte d r

e lationship be twe e n tr anspor tation inve stme nt and e c onomic de ve lopme nt

  • Collabor

ation among City and MT A staff be gan e ar ly in land use planning pr

  • c e ss
  • Compr

e he nsive land use and tr ansit plan

  • F

inanc e str ate gie s base d on munic ipal powe r s

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SLIDE 4

Hudson Ya rds Distric t:

City Goa ls a nd Outc ome s City Goa ls

  • Re zoning to e xpand Manhattan busine ss distr

ic t

  • Pr
  • vide tr

ansit by e xte nding subway

  • F

ast imple me ntation to me e t Olympic bid de adline

Outc ome s

  • NYC c r

e ate d financ ing me c hanism in zoning and thr

  • ugh its industr

ial de ve lopme nt age nc y

  • City r

aise d $3.2 billion for subway and othe r infr astr uc tur e inc luding par ks

  • Subway e xte nsion ope ne d 2015

E xte nsion

7 line e xte nsion to 34th St and11th Ave

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SLIDE 5

Re ve nue sourc e s for 7 line e xte nsion

One T ime De ve lopme nt Re late d Re ve nue s

  • T

ax: Payme nts in L ie u of Mor tgage Re c or ding T ax (PIL OMRT s)

  • Zoning: Distr

ic t Impr

  • ve me nt F

und Bonus (DIB) Payme nts

  • Zoning: Sale of E

aste r n Rail Yar d T r ansfe r able De ve lopme nt Rights (E RY T DRs)

Re c ur r ing Pr

  • pe r

ty T ax Re ve nue s

  • T

ax: Payme nts in L ie u of T axe s (PIL OT s) ge ne r ate d by c omme r c ial pr

  • pe r

ty

  • T

ax: E quivale nc y Payme nts (T E Ps) r e lating mainly to ne w r e side ntial de ve lopme nt

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SLIDE 6

Re ve nue g e ne ra te d throug h zoning

E RY T DRs Ge ne r ating Site E RY T DRs Re c e iving Site s Distr ic t Impr

  • ve me nt

Bonus (DIB) available

  • n the se site s

42nd St. E RY T DRs 34th St. 8th Ave . 10th Ave .

Re ve nue Me c ha nisms

  • F
  • c us de ve lopme nt ne a r tra nsit
  • Cre a te a re ve nue sourc e

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SLIDE 7

Illustra tion of zoning bonus me c ha nisms

Comme rc ia l Offic e T

  • we r c a n

purc ha se from two zoning funds: 1) Distric t Improve me nt F und Bonus (DIB) 2)T ra nsfe r of De ve lopme nt Rig hts (T DR) from MT A e a ste rn ra il ya rds

Distr ic t Impr

  • ve me nt

F und Bo nus (DIB) Base (As-Of- Right) De ve lo pme nt T r ansfe r

  • f De ve lo pme nt

Rights (“T DRs”)

A

7

Sourc e : HYDC

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SLIDE 8

Re ve nue g e ne ra te d throug h re a l e sta te ta x pla n with ta xe s ple dg e d to bond re pa yme nt

So urc e : HYDC

T ax e xe mption polic y pr

  • vide s e ar

ly inve stor s gr e ate r be ne fit

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SLIDE 9

Hudson Ya rds Distric t:

MT A L IRR De ve lopme nt Site MT A Goa ls a nd Outc ome s

  • 2007 De ve lopme nt RF

Ps balanc e d r e al e state goals with ope r ational ne e ds of safe ty and r e liability

  • 2008 De ve lope r

(T he Re late d Companie s and Oxfor d) jointly se le c te d by MT A and City

  • 2013 Gr
  • und L

e ase e xe c ute d and c onstr uc tion star te d

  • 2016 $1 billion bond sale

bac ke d by r ail yar d r e al e state r e ve nue s

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Platfor m c onstr uc tion ove r yar d “thr

  • at” r

e quir e d c lose c oor dination be twe e n de ve lope r and L IRR

  • pe r

ating pe r sonne l.

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SLIDE 10

T

  • ta l MT

A re ve nue s will e xc e e d $1.6 billion

  • Gr
  • und r

e nt payme nts guar ante e d

  • $720 million str

uc tur al platfor m financ e d by de ve lope r

  • Payme nt in L

ie u of c onstr uc tion mate r ials sale s tax

  • MT

A r e c e ive s payme nts for

  • ff- site air

r ight sale s T ime War ne r will be 2nd talle st

  • ffic e in NYC at 1,296 fe e t

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18 million sq ft total de ve lopme nt. E aste r n Yar d pr imar ily c omme r c ial. Major te nants: Coac h, L ’Or e al USA, SAP, T ime War ne r , Boston Consulting Gr

  • up, We lls F

ar go Se c ur itie s

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SLIDE 11

F a c tors for suc c e ss in 7 line fina nc ing

 Close c oor

dination of land use planning and tr anspor tation planning

 T

r ansit was a c e ntr al c onc e r n of City

 Coor

dinate d e nvir

  • nme ntal r

e vie w

 Str

  • ng mar

ke t pote ntial

 Many unde r

built site s due to e xisting obsole te industr ial zoning whic h pr e ve nte d de ve lopme nt

 Pr

  • ximity to CBD and to wate r

fr

  • nt c r

e ating oppor tunity for both offic e and r e side ntial use s

 City assume d financ ial r

isk

 Bac kstop antic ipate d for

unc e r tain timing of c ash flows

 Suppor

t base d on c le ar r e lationship be twe e n de ve lopme nt and tr ansit impr

  • ve me nts

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